Mitt Romney's Big-Government Health Care Plan

Mitt Romney appears to have changed his mind once again about the statewide health care program he enacted as governor of Massachusetts. Obviously running for president in the next election, Romney is a brilliant man and an impressive candidate. But he has some explaining to do.

At first Romney boasted about the program. Signing the legislation in 2006, he claimed he had been able to "steal" the health care issue from the Democrats. This was understandable. Polls showed that Massachusetts health care reform proved popular among Massachusetts voters.

Then Romney clammed up, seldom mentioning the program during his bid last year for the GOP presidential nomination. This too was understandable. Romney was attempting to grasp the free-market mantle of Ronald Reagan. Touting a government-run health care program would scarcely have helped.

Now Romney has gone back to gushing about the program. "This Republican," he wrote last week in USA Today, "is proud to be the first governor to insure all his state's citizens."

This isn't understandable; it's baffling. After the present exercise in Washington, Republican primary voters in 2012 will prove even more dubious about government-run health care programs than they were last year, not less. More to the point, these days the Massachusetts program hardly looks like a model for the nation--or even for any other state. What it looks like is a mess.

A few questions that I suspect his fellow Republicans will sooner or later press Romney to address:

Item: Romney's program appears to have done very little about the central problem--actually, the only real problem--with health care: spiraling costs. In seven of the last eight years, as economist Irwin Stelzer has noted, per-capita spending on health care in Massachusetts has increased faster than in the nation as a whole, and health insurance costs in the Bay State now run about a third higher than the national average.

What's the point of a complicated health care program of subsidies and government controls if it fails to rein in expenses?

Item: The program has weighed down the state budget. In the last two years alone, spending on free and subsidized insurance plans for low-income citizens of the Bay State has doubled from $630 million in 2007 to an estimated $1.3 billion this year. "In tough times," as State Treasurer Timothy Cahill recently said, "[the program] just doesn't seem doable. We're all still waiting for the savings."

"The president must insist on a program that doesn't add to our spending burden," Romney argued last week. How does Romney explain the burden he himself added in Massachusetts?

Item: "No other state has made as much progress in covering their uninsured as Massachusetts," Romney claimed in USA Today. The percentage of uninsured residents in the Bay State has indeed dropped to 2.6%, the lowest in the nation. Yet a survey last year by the Boston Globe found that 13% of residents failed to obtain basic medical care. "Some are postponing treatments, and others are not filling prescriptions," the newspaper reported.

Why? "Because of high costs or an inability to pay bills from earlier procedures." "Many of the policies out there," Dr. David Himmelstein of Harvard explained, "have such huge co-payments and deductibles that people can't afford care."

Threaten people with tax penalties and, yes, you can force most of them into insurance plans. But if they still can't afford care, what good does it do?

Item: Lots of people have already figured out how to game the system.

Consider one example: the community health plan Harvard-Pilgrim, which has experienced a surge in short-term customers. These new customers purchase coverage for several months, run up big medical bills and then drop their insurance policies once their treatment has ended. Between April 2008 and March 2009, as the Wall Street Journal recently reported, some 40% of Harvard-Pilgrim's new customers remained with the plan for fewer than five months--incurring, on average, medical bills of $2,400 a month.

You can denounce these customers as bad actors, unfairly taking advantage of the system. What you cannot do is call them irrational. When they face high medical bills, they buy insurance. When they don't, they pay the tax penalty of about $900 instead.

"At the core of our health cost problem," Romney wrote last week, "is an incentive problem." What does Romney have to say about the perverse incentives his own program has produced?

Romney will no doubt have answers. But then there will be more questions--and, as problems in Massachusetts continue to proliferate, more questions after that. Soon Romney will have to make a decision. He may continue to champion the health care program he enacted in Massachusetts--and find that he is permitted to talk about almost nothing else. Or he may admit that he has learned the importance of reducing, not enlarging, the government role in health care--and move on to other issues, including tax cuts, entitlement reform, economic growth and the defense of the Republic.

Romney may defend one misbegotten program, in other words, or he may run for president of the United States.